Toledo Public Schools could reduce its upcoming levy request, after reports of a better-than-expected financial picture indicate projected deficits may be smaller than expected.

The Toledo Board of Education is expected to call a special meeting Friday, during which TPS Treasurer Matt Cleland plans to propose a range of millage rates lower than the 6.9-mill new permanent levy request approved in May by the board. TPS ended the 2012 fiscal year on Tuesday with $8.58 million more than expected. The original projected surplus was $2.64 million, but the actual surplus was determined to be $11.22 million.

The money, generated from both expenses that were lower than budgeted and revenues that were higher, would balance the district's budget for an additional year beyond what was previously projected, and greatly reduce future expected deficits.

GREATER SURPLUS

Toledo Public Schools Treasurer Matt Cleland revealed the district ended fiscal year 2012 year with a larger surplus than expected.

Projected surplus: $2.64 million

Final surplus: $11.22 million

Difference: $8.58 million

Mr. Cleland revealed the surplus and impending proposal to reduce the levy request during a meeting with The Blade's editorial board Wednesday. The current levy request would generate about $18.5 million a year for the district, and would cost the owner of a $100,000 home $211.28 per year. Mr. Cleland didn't say how much he will recommend the millage rate be reduced, instead saying he'll offer a range of rates for board members to consider.

He pointed to the city's continued sluggish economy and numerous levy requests — seven in Toledo on November's ballot — as reasons for the possible reduction.

"The public is not flush with cash, either," he said. "So if we can have an opportunity to make an adjustment in our millage and make it more palatable to the public, I think we have a responsibility to do that."

The surplus was attributed to three main sources, Mr. Cleland said. Possibly the biggest factor was that fewer students left for charter schools or applied for private school vouchers than projected, leading to about $3.7 million more in state funds than TPS or the Ohio Department of Education calculated.

The other two sources came from reduced costs: the switch to K-8 buildings from elementary and middle schools saved about $1 million more in salary than expected, and a new health-care plan accepted in negotiations by the district's unions also significantly reduced costs.

Before the new surplus, TPS projected its budget to be balanced through fiscal year 2013, with deficits appearing the next year and growing to a nearly $80 million cumulative deficit by 2016 without any new money. Expenditures were expected to run nearly $40 million more than revenue that year. Now, the district expects to stay in the black an additional year at current funding levels, and projects fiscal year 2016's cumulative deficit will be lower at $48 million.

When the board of education approved the levy request this spring, officials said the new money would be used to implement the next stages of the district's transformation plan and maintain the current programs developed in the last year. Thematic high schools; a science, technology, engineering, math, and medicine K-8 school, and development of a talented and gifted program for grades 3-6 are among programs TPS wants to start with funding from the levy.

The new surplus, combined with an approved 6.9-mill levy, could allow for even more new programs, but board President Lisa Sobecki said she recognizes the financial struggle many Toledoans face.

"We all understand the economic factors," Ms. Sobecki said.

The district also faces challenges in a levy passage because of a recent acknowledgement that previous state report card results were manipulated by the removal of habitually truant students' test scores.

TPS officials say Ohio Department of Education direction on how to report those students' scores has been unclear or inconsistent in the past; other districts, including Columbus, have admitted similar actions. Superintendent Jerome Pecko said he hopes a statewide investigation by State Auditor Dave Yost into the practice will exonerate TPS staff.